Apple will buy potato chips produced at the Arizona plant

Apple will use microchips produced by the Taiwan Semiconductor Manufacturing Company, headquartered in Phoenix, Apple CEO Tim Cook said on Tuesday at the event for the upcoming facility expansion.

“Today is only the beginning,” Cook said. “Today we combine the expertise of TSMC with the unrivaled ingenuity of American workers. We invest in a stronger, brighter future, planting our seed in the Arizona desert. At Apple, we are proud to help fuel its growth.”

The event was attended by President Joe Biden and CEOs from AMD and Nvidia along with Cook.

“Apple had to buy all of its advanced chips abroad, and now they’re going to bring more of their supply chain home,” Biden said. “It could be a game changer.”

TSMC is already building a Chip manufacturing plant, or fab, in Arizona City — a $12 billion investment to create processors with the latest 5nm manufacturing process that they use to make iPhone processors and other chips today. In a ceremony marking the arrival of the first chipmaking equipment at the factory, the company announced that it would also make improved 4nm chips there and build a second fab to make significantly more advanced 3nm chips. Total investment: $40 billion.

However, the new chips won’t work on next year’s iPhones, because it takes a long time to make a fab. TSMC broke ground on its 5nm fabha in April 2021, and won’t start producing chips until 2024. The newly minted chip maker won’t make 3nm until 2026.

TSMC’s customers currently rely on fabs in Taiwan, but newer fabs in the US could help ensure a US supply of processors, too. More American chip manufacturing It could also encourage a broader manufacturing ecosystem, including some business partners who supply equipment and materials to chipmakers and others who test, package and assemble chips after they’re made.

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The United States is unlikely to match the expansion of the electronics industry in Asia anytime soon, but if politicians and companies get their way, the semiconductor industry may avoid the fate of industries like steel and textiles that have largely disappeared from the United States.

Processors are essential to every modern product and industry, not just phones and laptops. They are used to control cars, refrigerators, military equipment, toys, and power plants. a Global chip shortage brought about by the COVID pandemic, it retained products such as the Ford F-150 pickup and Sony Playstation 5 out of the hands of customers and revealing the vulnerability of global supply chains.

TSMC’s expansion comes weeks later Micron invests $20 billion in Megafab in New York announced in October, which could eventually reach $100 billion, and Intel announced $20 billion in a couple of new manufacturers out of Columbus, Ohio, which also Its investment could reach $100 billion this decade.

More disruptions are possible. The Russian invasion of Ukraine showed that political boundaries are not necessarily fixed. This is of particular importance to Taiwan, the island nation that China claims as its own and which is home to most of TSMC’s manufacturing.

All of these forces combined to push Congress to pass Chips and the law of science. It promised nearly $53 billion in subsidies for off-the-shelf weapons, research into the semiconductor technology that underpins processors and spending to train the workers of the future. And it’s much more assertive industrial policy than the United States was in the past, when most of the chip industry moved overseas to its current stronghold in Asia.

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“We saw during the pandemic that something we took for granted, global supply chains, was actually a major vulnerability for the economy and our national security,” said Ronnie Chatterjee, acting deputy director for industrial policy at the White House. National Economic Councilin a press briefing.

Biden has pressed for CHIPS funding, often describing it as a success in rebuilding American manufacturing capabilities. The idea is to try to encourage private companies to make their own investments knowing that they will find a favorable economic climate.

“This is a marked departure from the economic philosophy that has prevailed in this country for the past 40 years,” said Brian Dacey, director of the National Economic Council. With the old strategy, “I said the government should get out of the way, cut taxes on big business, cut regulations, and assume that the American economy is going to benefit American families.”

The new policy could mean about $3 billion in support to boost construction of prefabricated buildings, which cost about $10 billion. This makes the US more competitive with Asian countries such as Taiwan, South Korea and China, said Pat Gelsinger, CEO of Intel. Intel has a large presence in Chandler, right next door to Phoenix, and is building a $20 billion new phablet industry there.

TSMC’s fab will employ about 10,000 people overall, of which 4,500 will work directly at TSMC. In addition, the construction of prefabricated buildings employs more than 10,000 construction workers, the company said.

In addition to the more than 10,000 construction workers who helped build the site, TSMC in Arizona is expected to create more than 10,000 high-paying high-tech jobs, including 4,500 direct jobs at TSMC. When completed, TSMC’s two Arizona businesses will make more than 600,000 wafer bars annually, with an estimated final product value of more than $40 billion.

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One of the biggest fans of TSMC’s expansion is Nvidia, which relies on TSMC to make its graphics chips and AI accelerators. “Bringing TSMC’s investment into the US is a major blow and a game-changing development in the industry,” CEO Jensen Huang said in a statement.

Deese and Chatterjee stop promising that new investments will benefit from CHIPS funding. Details of how to apply won’t arrive until the first quarter of 2023. But they cited comments from chip manufacturing executives who described the legislation as a reason for their investments in the US.

“Passing the CHIPS and Science Act was critical in providing long-term certainty to companies like TSMC to expand their presence and broaden their investment commitment in the United States,” said Deese.

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